Stakes are high in Apple-Samsung retrial

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A federal jury is charged with recalculating the damages Samsung owes Apple for patent violations. The jury in the original trial miscalculated the time period that was involved.

By Joel Rosenblatt
Bloomberg News
November 13, 2013

SAN JOSE, Calif. — Apple is set for a replay of a court fight against Samsung in which the iPhone maker may seek to recoup more than the $411 million in damages a judge cut from a $1.05 billion jury award in 2012 over patents.

Jury selection was underway Tuesday in a retrial over how much Samsung Electronics Co. should pay for infringement of Apple Inc.’s intellectual property. The verdict in August 2012, the year’s largest in the United States at the time, was found by a judge to be flawed because jurors miscalculated the period when the infringement occurred for some of the 28 Samsung devices on trial.

US District Judge Lucy Koh will instruct jurors at the retrial that the previous jury found Samsung infringed on five valid Apple patents and that their ‘‘sole job’’ is to determine the amount of damages Samsung must pay. While Apple has not said how much it will seek, this jury’s revision of the damages may result in more than the $410.6 million subtracted from the previous award, said Carl Howe, a Yankee Group analyst.

‘‘The argument at this point is simply about how much Samsung must pay Apple,’’ Howe said. ‘‘In my view, there is no chance that the penalties assessed will be small; the argument is just over whether they will be big or huge.’’

In battles before courts and trade regulators, the world’s two top smartphone makers are spending hundreds of millions of dollars in legal fees on claims they copied each other’s features. Apple, which initiated the fight in 2011, seeks to limit the Galaxy maker’s rising share of the US smartphone market, where Apple is number one and Samsung is number two.

In March, Koh concluded the original jury may have overstated damages by basing its calculations on incorrect dates for when Samsung was first on notice its products infringed on Apple’s patents. She also found that the jury mistakenly awarded damages on profits for some Samsung products that infringed only on utility patents, which isn’t legally permitted.

Spokesmen for Samsung and Apple declined to comment on the retrial.

Koh has blocked the companies from presenting exhibits or witnesses that weren’t part of the first trial, except that Apple will rely on a new damages expert because its first one, Terry Musika, died in December.

For two of the patents at issue in the retrial, the evidence supports a notice date 10 months later than what Musika relied on, Koh said in the March ruling. The original award ‘‘may have contained some amount of excess compensation.’’

Apple’s new damages expert is Julie Davis, a Chicago CPA who, according to a court filing, has worked on more than 300 intellectual property disputes. Samsung will rely on the same damages expert it originally used, Michael Wagner.

In a repeat of a 2012 pretrial skirmish, Samsung objected to the retrial jury being shown images of Apple’s iconic cofounder, the late Steve Jobs.

‘‘The gratuitous video of Mr. Jobs has no evidentiary value and has been proposed by Apple in order to turn the trial into the popularity contest that the court has prohibited,’’ Samsung said in a court filing.

Koh ruled that the video is ‘‘not unduly prejudicial’’ and is relevant because it shows demand for the iPhone and its patented features, specifically the way an iPad or iPhone screen seems to bounce when a user scrolls to the end of a file.

For the jury picked to hear the retrial, there will be one more big difference. The original panel was given 109 pages of instructions and tasked with answering more than 600 questions following a three-week trial that produced dozens of exhibits and 50 hours of argument and testimony. The retrial is expected to last seven days, and the verdict form requires the jury to calculate damages only for 13 products and tally them up.

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